Star Valley, Payson, Gila County will set up special district this week

Payson and Arizona State University will break ground on a four-year campus in December, says Payson Mayor Kenny Evans.

Moreover, Payson, Star Valley and Gila County will each act within the next week to establish a Separate Legal Entity, a special district that will build the college and related facilities while insulating taxpayers outside the 360-acre district from liability.

Evans acknowledged that ASU has not yet signed a memorandum of understanding (MOU) spelling out its responsibilities, but that depends on plugging new numbers into a “math problem.”

Evans had top level meetings with ASU and the Forest Service last week to hammer out additional crucial details. Backers of the campus have already bought 60 acres for the first phase of the campus and hope to buy an additional 300 acres from the Forest Service within the next year.

ASU “has spent substantial money, time and effort on this campus. But because it’s such a big deal, we’re more careful to get it right. If it was easy, somebody would have done it already,” Evans said.

Backers of the campus plan continued to hold a swirl of meetings on the complex, cliffhanger negotiations which have been repeatedly battered by state budget cuts. Backers have renegotiated financing, tried to get the Forest Service to move quickly to sell a 300-acre parcel and are now also overhauling a $50 million plan to build a solar cell power plant to provide energy for the “green,” high-tech campus.

ASU has promised to provide figures for the crucial “math problem” the campus plan confronts now — how different levels of state support might affect the scope and marketability of the program.

Currently, the state provides ASU about $6,000 in support for each full-time student at any of its three Valley campuses. Those per-student dollars have declined by almost 50 percent in the past few years. As a result, tuition has doubled to about $9,000 annually.

The allure of the Payson campus for ASU has been the prospect of accommodating up to 6,000 additional students, each paying half as much tuition as at the Tempe campus. When ASU and Payson started negotiations, half the Tempe tuition would have been about $3,000. Now, it’s nearly $5,000.

Backers had put together $400 million in 3 percent financing, which means the whole project had to generate a revenue stream of just $6 million annually to pencil out.

However, Gov. Jan Brewer vetoed a law that would have allowed ASU to partner with Payson to establish the Separate Legal Entity.

That not only complicated the effort to use money from a convention hotel and research park to lower costs for ASU, it forced the project backers to renegotiate the financing and settle for a 5 percent interest rate. That will ultimately add $200 million to the cost of the project — and means it must generate an additional $10 million in revenue annually.

That will make it much harder to keep tuition below the 50 percent mark — and makes the per-student operational support much more important.

The Legislature remains the wild card in the calculations.

For instance, perhaps the state will provide the same $6,000 per student at the new Payson campus as it now provides for the rest of the system.

Coupled with tuition set at $4,000 to $5,000, that would provide sufficient money to move forward with the original plan.

But suppose the Legislature decides to provide only $3,000 per student on the Payson campus. That makes the “math problem” much tougher –— and would likely make it impossible to keep tuition below 50 percent.

But what happens if the Legislature decides to cripple this prototype for a state college system and refuses to provide any per-student support?

In that case, ASU would have to charge enough tuition to cover the full cost. Early in the project, even that seemed manageable. But then Gov. Brewer’s veto scrambled the equation.

“They just haven’t been able to come up with those numbers before now because it’s such a moving target,” said Evans.

Evans said ASU officials have promised that within two weeks they’ll fill in the blanks on that math problem, so the architects and planners can finish the plans for the first phase of the campus, which will likely provide classrooms and dorms for 700 to 2,000 students on the parcel north of the highway adjacent to Gila Community College.

“They’re trying to negotiate the best deal they can get,” said Evans.

However, he said ASU officials also realize they’re running out of time, with backers spending $50,000 each week on planning for the campus.

Covering the Event Center

The ambitious plans to cover the Event Center and its parking lot with a roof covered with solar cells still faces an inexorable August deadline in order to take advantage of federal tax incentives and grants that will reduce the cost of the project by nearly 50 percent.

Planners are considering scaling that element of the 5-megawatt project back if ASU cannot make a firm commitment in time. That might mean the campus would still run on solar power, but the Event Center wouldn’t end up with a roof, said Evans.

“I don’t know if we’ll end up with the original plan, but we’re struggling mightily,” he added.

He said he’s confident that Payson and ASU will work out the final kinks in the next few weeks, but no matter what ASU decides, Payson will have a college campus he said.

“I think a private partner would have the flexibility to buy into the project in a more timely way than a public university,” he said.

However, he said he still believes that ASU would make the best partner.

“If I didn’t believe that was best for the community, I would have thrown in the towel a long time ago.”

In the meantime, Payson officials continue to press the Forest Service to approve the sale of a 300-acre site Congress approved for sale a decade ago.

The Forest Service has reportedly completed a report on the sale. The current plan calls for the Forest Service to retain enough land for a new ranger station, which would sit close to the present, small facility.

As part of the deal, the Forest Service would also acquire a piece of town-owned land near the Payson Airport, where it could base its firefighting and maintenance operations. The sale of the 300 acres would essentially finance a new ranger station and upgraded firefighting facilities the district could likely not otherwise afford.

Evans said he believes ASU will move forward with the project and the delays have been caused by outside forces, like the chaotic state budget.

Some of the proposed cuts and legislative plans to reorganize the system have threatened the very existence of the state’s universities in their present form, he said.

“ASU has been getting beat up in ways that get at their very roots. In my case, the ax is chopping at my toes and in their case the ax has been chopping them off at the knees. Maybe you could make them sign something — but it’s not worth pursuing if there’s not a solid ASU to work with.”